Quarterly report pursuant to Section 13 or 15(d)

GOING CONCERN

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GOING CONCERN
3 Months Ended
Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 2: GOING CONCERN

 

The Company’s consolidated financial statements are prepared using Generally Accepted Accounting Principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative operating cash flows since inception. For the three months March 31, 2018 and the year ended December 31, 2017, the Company recorded a net loss of approximately $1.9 million and $8.1 million, respectively and used approximately $2.4 million and $6.6 million of cash in operating activities, respectively. As of March 31, 2018 and December 31, 2017 the Company had approximately $4.8 million and $7.2 million, respectively in cash and cash equivalents and working capital of approximately $5.0 million and $6.7 million, respectively. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such capital will be obtained on acceptable terms. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its activities. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern.

 

Management’s plan to continue as a going concern includes obtaining additional capital resources. Management’s plans to obtain such resources for the Company include obtaining capital from the sale of its equity securities, potential exercise of outstanding warrants, and short-term borrowings from banks, stockholders or other related parties, if needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

 

As of the date of filing this report, without giving effect to the rights offering described in “Liquidity and Capital Resources” included in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,we expect that our existing resources will be sufficient to fund our planned operations for the next five to eight months; however, additional capital resources will be needed to fund operations longer-term.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraphs and eventually to secure other sources of financing and attain profitable operations.